HSBC: "We believe the serverDRAM driven upcycle should persist, while surging eSSD demand should boost prices further until 1H26e on top of solid HBM demand from ASIC customers and a 30-40%premium in HBM4.
Server DRAM prices are soaring as: 1) AI processing moves intoedge AI for inferencing from training, demanding more regular servers; 2) low inventory at DRAM and server OEM, and 15-20% y-o-y content increases in servers (vs historical 10%); 3) solid DDR4 demand from conventional CPUs; and 4) ongoing productionissues at 1 beta node DRAM and Chinese producers. Moreover, robust NAND demandwill prolong the memory upcycle as: 1) a HDD shortage should accelerate SSD transitionin servers, with eSSD accounting for 40% of total NAND demand by 2027e (from 18% in 2023); 2) delayed layer upgrades to limit output growth;